The Role That Higher Education Plays in Black-White Income Gap

An article published by the The Journal of Blacks in Higher Education discussed the role that higher education plays in explaining the black-white income gap. Specifically, it suggested that higher education plays a crucial role in tightening this gap. This reminded me about a few things that we discussed throughout this course. First, we talked about the income gap in 1940, during which time the average black person earned 40% of the wages that the average white man earned. By 1980, this gap got smaller, and blacks earned 80% of the wages that the average white man earned. The factors that contributed to this were migration (from a low wage region to a higher one), years of schooling, and the quality of schooling. This article reveals that, even today, black men with professional degrees earn considerably less than white men with similar degrees. The authors say that this is because white men have a better established clientele and therefore are in a position to charge higher fees. On the other hand, black professionals tend to perform these services exclusively to a black clientele. These clients are usually not in a position to pay large fees for services. As a result, they typically charge less for similar services. Interestingly, the article also highlights that black women tend to earn more relative to black men with similar education credentials. Perhaps, this is because women have a comparative advantage in skilled labor relative to men.

Source: http://www.jbhe.com/news_views/55_closing_the_income_gap.html